Cabin fever

21 December 2017 By Christopher Beddor Follow @cbeddor

The $177 bln aerospace giant is in talks to acquire the $3.7 bln Brazilian jetmaker. It makes strategic sense, given rival Airbus’s deal with Bombardier. But Embraer’s government shareholder means the deal may come with a high premium and low returns.

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Boeing is in talks with Brazilian rival aeroplane maker Embraer EMBR3.SA over a “potential combination,” the companies said on Dec. 21.

Any tie-up would require approval by the Brazilian government, which holds a “golden share” in Embraer, a formerly state-owned company. It would also require the approval of the two companies’ boards and Embraer shareholders.

"Embraer will never be sold in my government,” newspaper Folha de S.Paulo reported Brazilian President Michel Temer as saying.

Embraer shares were trading at 20.20 Brazilian reais at 1520 EST on Dec. 21, 22.5 percent above the previous day’s close.

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